What IS a Philosophy of Compensation?

Littleford & Associates has been helping schools design salary and benefits systems since 1983. Over thirty years later, we find that the leadership of most schools worldwide still has no idea about what a philosophy of compensation really is and what it represents; how important it is; and how all benefit systems and salary systems should flow from that statement of values.

Fewer still seem to realize that a philosophy of compensation must be different from that of any other school. Why? Because it is supposed to flow FROM the mission, and the mission for every school should be as distinctive and unique as possible. Just the other day, I along with many others who are members of one international network received an e mail from a Head of School. She was asking if any Head might be willing to share his or her school’s philosophy of compensation. Clearly this Head recognized that her school should develop one but did not know that one does not “borrow” one from another school. That defeats the purpose.

A philosophy of compensation must have the ultimate approval and “sign off’ from the board and its leadership including not only the head but the CFO, division heads, and advancement and admission teams. It must also have a cross-section of the faculty, especially long term valued teachers who understand the school’s unique culture, history and traditions, engaged in creating that statement. All of these individuals should be involved in this process as they are all a part of supporting the mission.

A single sex school will have a mission different from a coed one. A Quaker school will have a mission different from that of a nonsectarian, Jewish, Roman Catholic or Christian day school. Conservative, progressive and culturally specific schools should have mission statements that do NOT look like each other’s. Just as prospective parents should be able to tell by a school’s mission statement what is unique about it, the philosophy of compensation statement should also indicate to prospective teachers and employees what is valued or NOT valued in this school.

A philosophy of compensation is NOT a goal to provide a total faculty compensation package ranking among the top 10% of packages that independent schools in Atlanta or California or in NAlS provide or that prominent New England boarding schools offer their teachers. Those are GROUPINGS. Few folks who are informed would say that the culture of Taft is similar to the culture of St. Paul’s even though both are New England boarding schools; or that the culture of Brearley is similar to that of the Hamlin School (both schools for girls); or that Proctor Academy has a culture similar to that of Groton. In the international school realm, the culture of the American School in Paris is not going to resemble that of the Anglo American School of Moscow or the International School of Beijing, nor should their missions be similar. All these schools grew out of a distinct past and have a history and a legacy of incidents, experiences and memories that help to define the mission.

Thus starting with a clear and unified mission, a group of board members, administrators and teachers should engage in a deliberative, collaborative process with or without outside consulting assistance, but generally having that assistance is helpful and advisable. Their charge should be to develop a compensation philosophy that is based upon the mission and becomes a starting point for refining or redesigning the salary system and corollary benefit package. That philosophy of compensation should not be so generic as to be like other schools’ statements. It should clearly outline the kind of teachers that the school does and does NOT want to attract.

One School in the Middle East wants to be a banner model for inspiration and leadership, peace and prosperity for a region seeking stability but often not yet finding it. This School wants to serve that region specifically and wants its teachers to live in the boarding residences; coach sports; advise students; and engage in a wide variety of after school activities, clubs and leadership options. It does not want teachers who come at 8:30am, leave at 3:30pm and only want to teach four classes a day with two preps. This School pays well but it does seek out ONLY those who want to immerse themselves in boarding school life. Its salary system clearly rewards these teachers by honoring both longevity of service through steps and qualitative achievements in other components of school life besides classroom teaching.

Often new heads inherit old systems, both evaluation systems and compensation plans. Many of these have been tinkered with and gerrymandered over time to fit the needs of the cohort of teachers whom the head or director is trying to hire at the time. These might be new teachers fresh from the marketplace; mid career teachers with energy and children; or perhaps teachers with the empty nest at home who want to recommit themselves to their teaching career. Adjustments to the system or scale that meet the hiring needs of the moment then become irrelevant or outdated.

One school Head who invited me to come on site to help assess the current compensation and evaluation systems asked me what I had found most interesting. I, in turn, asked him a question: “Did he realize that at this wonderful School in a dangerous but beautiful part of the world, he had more single women on his faculty that I have ever found in similar settings?” The Head did not. I said it was because in the international network of schools this place was known to provide single women with homes, not apartments, and these homes often had yards, horse paddocks, gardens, even small farms. All came with full security and security guards.

My question to him: Was this an intentional policy to draw these folks? He had no idea as he had just arrived there as the new Head. Sometimes policies evolve over time, and the school leadership and the board no longer understand their original purpose.

Schools devise benefit systems in a similar fashion. For example, at one time a school may have covered all medical costs for the family, provided tax free tuition remission for faculty children, and perhaps extended day care benefits, free lunch, etc. But then schools may find that they need to attract single teachers as well who tend to be more willing to be the “triple threat” teacher who can coach, advise and teach and maybe even serve in the dorm. Single folks often tell this Consultant about 50,000USD of tax free tuition benefits that goes to those staff with children, whereas the single person or person with grown children will never see that money in any form coming to them. They are right. Is the benefit system currently meeting the mission and philosophy of compensation or was it accidentally evolving over time?

The same is true for evaluation processes. Are they mission-based? Is the purpose of evaluation to assess performance? To grant tenure (real or just political)? To determine retention? Solely to award PD funds or summer grants? To engage teachers in goalsetting with minimal supervision and assessment? Is the evaluation process the same for new, mid career and senior teachers? Do the outcomes of evaluation affect compensation, promotion or quasi administrative assignments like HOD, and IB, PYP, MYP coordinator roles?

The vast majority of board members who are responsible for the fiscal health of an independent school have no idea about how 85% of the budget is spent. That 85% goes to staff salaries and benefits and most boards really have little or no knowledge of the following: the theory or of the practice of the current salary system; how the benefit systems functions; which group(s) of teachers and staff are most hurt or most favored by the current compensation and benefit package; why and whether all of this is intentional and mission-based versus accidental. Can you imagine this situation occurring in a functioning healthy corporate setting?

When a new head arrives he or she inherits the systems of the preceding heads. Most new heads find special deals that were never formally documented or based upon evaluation but based instead upon individual teacher negotiation and pressure. This happens even in public schools and even in independent schools with lock step lane and track salary scales that were created ostensibly to avoid deals and inequities and to ensure transparency.

Despite the best of intentions eventually all salary systems collapse under the weight of individual negotiations and/or efforts to recruit or retain certain groups of teachers. Almost all no longer serve the same purpose and role they once did. That is why the board, the administration and faculty must periodically engage in a purposeful review of this important connection of mission to philosophy of compensation to salary, benefit and evaluation systems.

Faculty Salary System Designs: Becoming More Innovative

I. An Interesting Model

 Picture a well-known boarding school which has four compensation “strands”:

  1. There is a typical, age based salary scale, up to age 55, designed to reward those who entered teaching later in life and who may bring to the table valuable experience from another profession. This School believes that sometimes those who come from legal, accounting, corporate finance, reporting or writing careers have important insights that lifelong teachers do not. When this Consultant was on site, it was intriguing to note that such individuals were in fact some of the most valued teachers on campus. One was a 45 year old former Accountant with a major accounting Firm. He also had a child in the School. He was highly effective in the classroom and beloved by his students. Why bring those individuals in at the bottom of a salary scale that is exclusively based on teaching experience?
  1. This School also has an experienced based salary scale that kicks in along with the age based scale, but it is capped at 8 years of experience. Most of the research shows that teachers do not necessarily become more effective each year just because they have spent another year in the classroom. They have to change, learn and grow for that to happen.
  1. This School has an extracurricular based salary system that assumes every teacher is doing at least one full season per year of the equivalent of coaching a Junior varsity sport. Above that full load, there is a stipend given for each additional coaching assignment of comparable or more time.
  1. Finally, this School has a “merit” based salary system. About 30% of the faculty receives a $10,000 annual bonus, not added to base, and determined by the Head of the School with input from the Deans and Department Heads.

The Head asked this Consultant to assess the effectiveness of the “merit pay” system. In interviews with the faculty, everyone who received the $10,000 bonus at the end of June was grateful. However, no one really knew why he or she received it. Those who did not receive it did not know why they did not qualify. Those who wanted to earn it did not know what to do to earn it. In other words, the system was generous but there was no substantive evaluation process that formed the basis for the merit pay.

At the time, the Heads of Departments did not really evaluate their faculty formally on a regular, annual or even periodic basis. When they did, they committed the classic “no no’s” of teacher evaluation: they announced their arrival in advance, participated in the class and did not allot enough time to the process. In fairness, the Department Heads had the title, stipend and reduced workload that usually accompany evaluation responsibilities, but no one had ever trained them in the mechanics and methodology of effective appraisal.

This Consultant observed that the School had many interesting and creative elements of compensation design. All were well intended. Some worked very well. Some did not. The School lacked any mission based philosophy of compensation and the salary system and its various components were not viewed in any way as related to the School’s mission. Only the age based salary scale reflected one of the traits that the School (or at least the Head of School) valued in its teachers: a desire to be a lifelong learner.

II. A Second Interesting Model

 This School has a salary system which on paper at first glance is a bit difficult to read. But with a careful second look, the underlying philosophy of compensation becomes clearer. A prior Head designed this system and over time, some of its original intent has been lost. But it is intriguing and for the most part, still works.

There is a graph with salaries on the left side from a starting salary of $40,000 to an ending salary of $110,000. Along the bottom of the graph are years of experience out to 30 plus years. Then there are two lines sketched across the graph. They start together at the bottom left with almost no gap between them and then to the right, the gap grows as the top line continues up and the bottom line flattens out around 15 years of experience. This is a classic design based upon research about effective teaching, i.e., teachers do not become automatically more skilled at their craft just by spending year after year in the classroom.

The “gap” represents a qualitative approach. Young teachers move up very quickly to ensure they earn a living wage soon and indeed within five years, the bottom line shows a minimum salary of $55,000. But the top line and the bottom line show a “gap” of only a few thousand dollars at years three to five, whereas at twenty years of teaching experience the gap between the two lines is over $25,000. The “gap” represents a qualitative assessment in five categories that occurs every two years:

  1. Quality of teaching in the classroom as assessed every two years by a team of three individuals;
  2. Quality of commitment to advisory roles/pastoral care for students;
  3. Commitment to mentoring and supporting one’s fellow teachers;
  4. Commitment to innovation in instruction and research into teaching methods; and
  5. Commitment to the extracurricular life of the school

These five points determine placement among one’s peer teaching professionals at the School. This Consultant’s findings demonstrated that there was indeed a gap of at least $15,000 at some points for teachers of the same experience. That prompted a review of the files to ascertain if the written evaluations reflected clear differences between the teacher earning $15,000 more than his/her peer and the lower paid peer. The evidence was there, in writing, over a period of years. Imagine how unusual that is!

How did the teachers feel about the system? They felt for the most part it worked because a committee of the Head, Division Head, the Athletic Director, the Guidance Counselor, and the CFO determined their placement “between the lines”. Department Heads were willing to give input about teacher performance in and outside of the classroom but not to be a part of this particular deliberative process. Despite this, most of the faculty felt the system was fair.

III. A New School Starting from Scratch

 A third school is about five years old, and negotiated the salary of every new teacher hired. The anomalies of individually negotiated salaries have begun to occur already. However, the Head has decided to engage in a dialogue (with the help of this Consultant) to create a philosophy of compensation based on this new boarding school’s mission. That philosophy of compensation will be the foundation for the development of a salary system that will attract, retain, reward, nurture and develop teachers who are attracted to the mission, believe in it and clearly are living it. This is an admirable goal and rare in this Consultant’s experience. The School is new and thus has the advantage of starting with a blank slate: no formal, documented, bad habits and no grid, salary scale or system to which individuals are wedded.

Of course, teachers coming into the School bring their own biases based on the salary systems that they experienced at other schools. These are usually individually negotiated salaries or a lock step, experienced based salary scale with extracurricular pay, PR’s or stipends for assignments outside the core teaching role. This new School wants a broader definition of a full time job in order to attract teachers who wish to develop a vibrant residential life.

This is an exciting venture, but it does test the inbuilt biases of all of us who have witnessed a sad array of depressingly familiar and similar salary systems/scales/grids from around the world.

IV. The Message

It is wise periodically for a head to engage with a cross section of the faculty, administration and board in a discussion of salary system design. Since staff salaries and benefits represent 85% of most day school budgets (and about 50% for boarding schools), it is amazing that most boards have no idea of what the salary system is; how it works; what results it achieves; how the staff view it; or how to revise the model to make it more mission AND cost effective.

Littleford & Associates has helped over 1500 schools worldwide in the past 25 years review their salary, evaluation and appraisal systems and their benefit plans to help them effect appropriate changes and to understand how their existing systems either reward, or are a disincentive to teachers. It is time all schools engaged in an intellectual dialogue about this important aspect of school life and, of course, the budget.

Compensation, Collaboration and Culture: A Winning Story

One of the most challenging issues for schools and school leaders is managing expectations about salaries, benefits, workload, evaluation, professional development and job security. Leaders must at the same time build a trusting environment in which the school’s needs for quality, accountability and cost controls are met while the ability to recruit and retain the best teachers available is ensured.

School culture, i.e., the history and lore of each school’s internal “story” is a crucial back drop to managing change and bringing improvement to the sensitive themes mentioned above. School culture either allows for or impedes collaboration between staff and administration when a discussion about compensation and workload must occur. Furthermore there are often deep issues of resentment and even anger within faculty cultures about compensation/ benefits/workload/evaluation.

There is a proven process that has worked well in over 2500 independent and international schools for the past 25 years. This process addresses the need to be creative yet realistic with the challenges of compensation and workload while managing the financial constraints that the board and the budget dictate. It is an intellectual dialogue among trustees, teachers and administrators guided by specific rules of engagement that provide for honesty, sharing of information, management of expectations and collaboration. This dialogue enhances school culture as well as deals with the prickly issues of money and time.

The schools for which Littleford & Associates has undertaken this process are located in 35 countries so it is not a one size fits all solution. It is very culturally dependent. Here are the steps:

  1. Review goals with the Board leadership, head and senior management team. What are the compensation, workload, salary system, benefits design, professional development and cultural enhancement expectations? Are there clarity and agreement among the Chair, Head and senior leadership team about these goals? Is there receptivity to allowing faculty input in a structured format?
  2. Invite teachers to participate in a process that is not tied to a specific calendar or time frame but is an opportunity for teachers, board members and administrators to talk about these sensitive themes. It can take as little as 6 months from beginning to end or up to a year. Teachers need time to talk and reason. Board members, who are crucial to the process, want to move more quickly toward a conclusion. They should. They are volunteers but they also bring their business acumen and perspective to a review of salary system design, benefits and even teacher appraisal/ evaluation and professional growth.
  3. The Consultant interviews key trustees, the entire leadership team and a cross section of teachers in individual confidential sessions to gather a body of data about faculty quality of life, benefits, professional growth opportunities and overall compensation, including its design and methodology, evaluation, and workload. Such sessions should also build connections, rapport and credibility with these individual teachers. Confidentiality is crucial. The outside perspective is equally important.
  4. The listening process is important because every teacher has a “story” about his or her life or that of a colleague: how the individual or family fares under the current salary and benefit system and what kind of philosophical messages the current salary system conveys to them personally. The Consultant learns whether the faculty and the leadership see any relationship between the school’s mission and the compensation and benefits structure and the evaluation/professional growth process. Or were their systems borrowed from some other school? Schools should not “import” or mimic other schools in the creation of salary delivery systems or benefit packages unless all schools are alike. And of course, they are not.
  5. At the end of the interview process or “listening time”, all those who participated attend a 3 hour workshop. The concluding workshop reveals what the Consultant uncovered in the way of patterns, history, trust and effectiveness of delivery in money and benefits to the teachers. It is important to stress to board members and teachers at the outset that this process is NOT about more money. It is about defining the distribution systems that deliver the money, whether at the same amounts or higher. Given that up to 85% of a school’s budget is spent on salary and benefits, it is critically important that board members understand how the School’s resources are being spent, for what purpose, and to attract and retain what kind of people.
  6. The workshop also covers current best (and strange) practices worldwide in salary system design, benefit systems and the wide range of approaches to teacher evaluation/appraisal/professional growth. It explains the messages that various salary and benefits schemes send. Do these schemes favor single or married teachers or young, mid-career or senior teachers, for example? Which group or groups is gaining overall financially and which is falling behind?
  7. From the Consultant’s recommendations come the creation of three committees on these topics: evaluation/professional growth; salary system design (how to deliver the money and this includes the definition of a full time job); and benefits design and understanding them. Most teachers do not have a good grasp on how even the current benefits actually work.
  8. The first followup task is to develop a mission-based philosophy of compensation. Such a philosophy is the underpinning of the entire salary, benefits and evaluation system.
  9. The process that unfolds after the Consultant leaves is outlined in steps and in detail and involves building a larger and larger circle of acceptance of the Committee’ recommendations, with some modifications to those recommendations. The process involves board approval before going to a final meeting with the faculty as a whole and with presentations by each of the three committees.

At a prominent US independent school with 350 teachers, I heard the co chairs of the Benefits Committee make their presentation. The Board member Co-chair, also a CEO of a nationally known company, spoke first. A teacher sitting next to me in the audience said: “He sounds just like a teacher!” When the Co-chair, teacher, spoke, the same teacher sitting next to me said: “He sounds like a board member!” Yes. That is the point. Teachers and board members learn to walk in each other’s shoes during this journey and have empathy for the role of each other. The end result is always a substantial boost in faculty morale, regardless of the actual changes made to salary and benefits systems and evaluation protocols.

Original Newsletter

Up to 85% of Your School’s Budget

Board Members are accustomed simply to approving an annual percentage increase in the faculty salary pool. Few understand how salary system design can make teachers into winners and losers.

One international school embarked upon an extensive process of reviewing its faculty compensation and benefits package. The Board’s goal was to rein in escalating salaries and costs. The Administration’s goal was to have the ability and flexibility to recruit and retain top notch faculty in a competitive international market and a high cost local setting.

This project had potentially conflicting goals. Yet, the School took the plunge and engaged an external Consultant to get a read on its culture, faculty morale and their quality of life for each career and family group (single, married or with children).

The base salary for teachers at the top of the scale was over 110,000USD equivalent for as few as fifteen years at the School. However, entry level salaries were about 85,000USD. This gap between the starting and the highest salaries of less than 40,000USD created salary compression. The School provided neither housing nor medical but the quality of life was perceived to be excellent.

Yet faculty groups were faring differently. Expensive housing and an overall high cost of living meant that singles were struggling financially whereas overseas teachers who came as a pair were doing very well in a low tax environment.

Through the engagement of board members, administration and teachers in listening and dialogue, the School made several changes to the benefit plan and to the salary system. It now offers a modified career ladder by which a teacher not only moves “up” by staying another year, but based upon a number of criteria can also move laterally by meeting professional growth and other “stretch” goals.

This School’s system is designed in part to value and reward the career classroom teacher. Worldwide, most salary systems today reward teachers for taking on more extracurricular roles, positions of responsibility, or titles like department head and grade level and 1B coordinators. Discouraging great teachers from remaining in the classroom is becoming a crisis and actually costs more money.

A School in the US recently also engaged in a professional dialogue with teachers, board members and administration. This Head’s goal was to define teacher workload in the context of a total commitment to children in the classroom and in advisory, coaching, and extracurricular life. Boarding schools and traditional day schools often call this a “triple threat” model that commits teachers to the development of the whole child. This School, however, is in an urban setting where teachers are accustomed to coming and going when they are not teaching, and they have had historically few requirements outside of the classroom.

This Head’s task has been challenging because he is redefining a full-time job in a major way. But he has initiated a change in the school culture by proceeding deliberately and with political astuteness. The benefit package is clearer and some of its elements are improved; there is a bump in salaries to make them more competitive locally; teacher evaluation is more substantive; and professional growth is enhanced.

At another US day/boarding school, a new Head inherited a traditional lane and track salary system. Over time, particularly valuable and assertive teachers had negotiated many special and one-off deals around this system, and one might argue that the best came to the top in terms of pay. On the other hand, the lack of transparency, the number of deals made, and the fact that some excellent teachers did not know how or want to advocate for themselves created resentment that arose just as the new Head was about to arrive.

The new Head has now launched with outside assistance, a complete review of the salary, benefits and evaluation decision making processes. Board members paired with faculty are an integral part of this discussion. All are attempting to work towards the best long term interests of the staff and the School, and they are also building trust among all parties.

What do these schools, and others have in common?

  1. A need to revisit salaries and benefits systems that are no longer equitable or effective
  1. A desire to develop a mission based philosophy of compensation and a salary and benefit system that reflects that mission
  1. A desire to recruit, retain and nurture the best of the best
  1. Faculty participation in a process that affects them professionally and personally and that builds trust by connecting boards, teachers and administrators in a carefully designed way

Littleford & Associates has helped to launch this process successfully at over 2500 schools since 1983. The goals are meaningful dialogue, higher staff morale, better understanding of how money is spent, valuing teachers and students and allowing teachers and board members to walk in each other’s shoes.

Threading the Needle: Addressing Faculty Compensation Challenges While Avoiding Major Risks

A new client decided twenty years ago to adopt the salary scale of a local US public school system. At the time it seemed like a conveniently quick and reasonable idea. The scale was simple and the area teachers whom the School was trying to attract would consider it competitive. Now twenty years later, the School leadership has realized that there are many drawbacks to putting the same salary structure in place at a tuition based nonprofit as in a local tax supported school district. The most obvious issue is that your own faculty expects the school to keep pace with the public school district’s upward shifts in compensation. But when the local public school froze its salary scale in 2008-2010, the private school teachers felt it was unfair for their school to follow the local district’s compensation trend. The private school could not win by tying its scale to that of the public schools.

Years ago, after our Firm worked with an excellent school in Brussels on the topic of salary system design, the Head of HR at another fine international school in Europe called to say that she had heard positive things about our work at the Brussels school and inquired about whether that “template” was “for sale”. It was a legitimate question. She did not understand that a school cannot adopt another school’s salary model successfully and expect that in the long run that model will match its unique mission, vision, faculty culture and tone.

Another client in Latin America has a local currency based salary scale for locals and a separate salary scale in USD for the expat teachers. The two groups receive different benefits as well. Real confusion exists about what constitutes a “local hire” versus a “foreign hire.” For example, if a person speaks and teaches in fluent English and has a degree from a US University but was hired from another local school, he or she could be considered an overseas hire.

Over time, former Heads granted exceptions in order to land a key teacher. Some local teachers with very good bargaining skills also made a case for receiving expatriate pay and/or benefits. As a result, the distinctions between local and foreign hires became blurred. Even in this very polite culture some underlying resentment developed among the locals over these disparities. The salary scales for local and foreign hires are the result of much tinkering over the years so that the relatively new Head is still trying to decipher how some of the present anomalies occurred and how to manage them. It takes courage to tackle such a problem with a long undocumented history.

Another School adopted a banding model as a more creative alternative to its lock step salary grid that was based upon years of experience and advanced degrees. The intention was reasonable but the implementation was hasty. At the outset, the Administration did not set restrictions, quotas, limits or very high standards for attaining the status associated with the top ladder. Over time the faculty successfully negotiated for fast movement along the ladders or bands. As a result, most of the teachers are on or close to the top band. It feels like “grade inflation”. It is too costly for the School.

These examples are from Schools that adopted systems without modifying them to their own culture, history and mission or did not implement them carefully according to important and specific guidelines. Littleford & Associates specializes in helping schools design or redesign salary, benefit and evaluation systems that meet the mission/culture of the school and have “community buy in” to ensure a successful rollout. We have done this work in over 2400 schools worldwide since 1983.

John C. Littleford
Senior Partner

Performance Pay Can Work In Independent Schools

The Best of Times For Independent Schools

Independent schools are experiencing the best of times. Fund raising as well as tuition are going up steadily. Most boards believe independent school teachers should be paid more competitively. In addition, salaries are going up in the public schools. Public schools are providing signing bonuses, helping young teachers to obtain mortgages and, yes, even providing performance pay opportunities based on teaching quality, as well as on the results of other criteria.

All salary systems are based on a philosophical premise (or multiple premises) , which sends signals to teachers about what a school values.

However, administrators over time have lost track of how those messages are read by teachers. Schools tinker with salary systems without a real intellectual dialogue about what the system is designed to achieve.

Teachers are not risk takers. They are care givers. Littleford & Associates has interviewed over 10,000 of them in the past 10 years in confidential interviews. Most do not know their exact salary and even fewer know even remotely their retirement accumulations. This brings us to the first principle of teacher compensation:

      1. Teachers want absolutely predictability of future earning power. That is why teachers want scales, as salary scares go up inexorably every year.

However, once teachers have absolute predictability of future earning power, they run into a problem. Teachers need to have a way to make more money to address the needs of a new child, buying a car, purchasing a home, etc.

That brings us the to second basic principle of teacher compensation.

      1. Teachers also want to be able to influence future earning power and to know the rules for doing so.

Salary scales are meant to do away with bias and favoritism in salary setting. Yet over 50% of all independent schools still retains systems whereby the head negotiates individual salaries upon employment and each year thereafter. Thirty percent of independent schools have adopted scales of some sort, usually the ones based on longevity of experience and advanced degrees. The remaining twenty percent are the ones experimenting or quite experienced with “performance pay” in some form.

      1. Individually negotiated salaries over time may result in patterns of age and sex discrimination and are viewed by teachers as unfair. Teachers believe those who can lobby most effectively do best under this approach.

However, schools with salary scales have an equal if not greater set of problems.

      1. All salary scales are undermined over time by the actions of both administrators and teachers. They are undermined in order to enable schools to recruit and/or retain talented teachers and/or to meet the individual needs of valued teachers.

Ways in which scales are broken are numerous and often insidious in their long term effects. They include:

        1. Step systems that were once capped, but now which add steps every few years to enable teachers to earn more.
        2. Advanced degree and graduate credit systems that help pay for teachers to earn an advanced degree and then pay them more when they do. These systems include paying teachers extra for extra credits earned, often by up to 120 credits or more with a BA and similarly with an MA
        3. Extra curricular or co curricular pay for coaching, clubs, activities and other assignments.
        4. These systems were once designed to help ensure workload equity. They have not achieved that. Instead the concept, once begun, may know no bounds as teachers compete to have their activity added to the extra curricular system and pressure to have these stipends raised according to every year of service in performing them.
        5. Stipends that are paid for department heads, grade level coordinators, and assistants of all sorts. Many schools have faculty rosters where almost all the teachers have a title beside their name.

This is an obvious effort by both the school administration and the faculty to negotiate ways to undercut the scale by asking for or being asked to take on additional assignments.

A teacher recently told our firm that he had taken the department head role not because he wanted to supervise, evaluate and help fellow faculty grow but solely because of the additional remuneration and status the title conveyed. He said he would gladly have gone without the title, if he could have figured out a way to be paid more based on the quality of his teaching.

        1. Moonlighting and tutoring are additional tools to which teachers may resort to make ends meet and to earn more money.
      1. Research for the past 30 years has shown that there is no correlation between effective teaching on the one hand and advanced degrees on the other. So why are so many salary systems based on advanced degrees? It sells well to parents and the logic is that if a teacher has an advanced degree, they must teach better. It is also a non judgmental way to make a salary decision. It lets administrators off the hook.
      2. This same research has also demonstrated that there is no correlation between effective teaching and longevity of teaching service beyond the first five years. So why are most salary systems based on longevity? It seems logical, it avoids controversy, and it supports seniority. Teachers are wiser and more knowledgeable about the mission of the school and its culture over time. But teachers do not necessarily get better with every additional year in the classroom unless they change their teaching practices and grow professionally along the way.
    1. The Legacy of Performance Pay

One group of teachers in a boys boarding school told us that they chose many extra duties and jobs in order to earn more money. Counseling, coaching, and other assignments were taken on because of the stipends. Once taken on, these teachers said they could not afford to give up the activity regardless of their age, energy level or effectiveness.

In response to the question: “How do you find time to prepare for class each day”, these teachers answered: “We are not prepared.” The follow up question was: “But teaching is the basic reason you were hired.” The answer was prophetic: “Yes, but we do not get paid extra for it!” This is the logical absurdity of paying extra for everything that once used to be the definition of a full time job in an independent school, but not paying for quality of teaching.

Most schools never provided performance pay. They had “discretionary pay” and the head or heads left a bad taste in the mouths of teachers who felt slighted by this approach.

The word “merit pay” or “performance pay” are usually met by teachers with the following concerns:

      1. How can you quantify teaching results? We are not making widgets like a company does.
      2. Merit pay may turn colleagues against one another in the pursuit of the almighty dollar.
      3. Bias and favoritism would naturally predominate
      4. There has been no history of fair and consistent evaluation in our school, so how could anyone know what is actually happening in and out of the classroom?

These are just some of many legitimate challenges that teachers will raise about performance pay. What IS performance pay?

Performance pay is money paid out differentially according to a credible evaluation process and based on a set of criteria and procedures set by the school and faculty together. It may or may not be added to base salary and might come instead in the form of a bonus, not added to base salary.

    1. Key Conditions for the Success of Performance Pay
      1. A credible evaluation process that has a set of criteria and procedures that the teaching staff as well as administration has played a part in developing
      2. Trust in the evaluators themselves and in the fact they are knowledgeable and trained to do this work.
      3. Trust that the performance pay decisions are made by a group of people, not a sole evaluator. This speaks to the need to have all evaluation be based on a team of administrators and teachers, not a single individual
      4. Trust that performance pay is not being developed as a way to reduce salaries or hurt teachers. Schools should only introduce performance pay when salaries are going up by a larger than normal annual amount. It is in this context that teachers see a “win-win” opportunity for them and the school.
      5. A majority of teachers should earn performance pay. Teachers resent it when a minority is doing well and a majority is not. It is a good idea to set a target for about 50%-60% of the faculty to earn performance pay in the first several years such a system is introduced. After a period of time, all but a few teachers should be earning performance pay. Performance pay is not a penalty. It is an opportunity.

One client recently asked our firm to evaluate how their so called “merit pay” system was working. We interviewed 30% of the faculty, some of whom were earning as much as a $4000 differential for the same teaching experience. The teachers who were earning merit pay had no idea why. The teachers who were not earning it, did not know why. The teachers who wanted to earn it, did not know how to do that.

This was not a “merit pay” system. This was the head’s personal discretionary pay approach and this reputation for unfairness and not knowing the rules of the game colors the opinion of many teachers and administrators toward performance pay.

Performance pay is pay set by a group of people in the administrative team, based on recommendations from a team of evaluators, based in turn on a set of criteria and set of procedures that are fair and open. Performance pay may be of varying amounts and not always added to base. It is important to keep this in mind. It means no one should be surprised in earning or in not earning performance pay.

Performance pay may or may not be a part of a formal “career ladder” compensation structure. A career ladder is a system whereby the school spends its scarce salary resources according to the talents that teachers demonstrate over time. Teachers can move along a salary system on criteria other than simply longevity of experience or advanced degrees. Quality of teaching and quantity of workload as well as other criteria can weigh heavily here.

Many schools have adopted career ladders over the years. These systems always involve some element of performance pay. Career ladders may be “instructor”, “teacher”, “senior teacher”, and “faculty leader.” A shift from one category to the other, based on effective evaluation of overall performance, may bring a substantial increase in base salary OR may bring a bonus of some size.

For example, some schools with a “faculty leader” category may pay a lump sum bonus of $4000-$5000 a year for two years, after which a teacher must be reevaluated. This designation is usually limited to a maximum of 10-20% of the entire faculty. Why? Why does a university not make all its teachers “professors?” They cannot afford it, not all deserve that designation, and grade inflation undermines credibility of judgment, whether in evaluating a student or a teacher.

Does performance pay work in independent schools? Yes, if the culture is ready for it, if it is developed for the right reasons and under the right circumstances and in combination with (and following) effective credible evaluation. However, there is an important proviso. Performance pay will fail if teachers in a school want it to fail. It will succeed if teachers want it to succeed.

Littleford & Associates has assisted over 500 independent schools world wide with analyzing their current salary structures and benefit plans to determine how to improve those systems in ways that best fit the culture of the school, and benefits the school and the teaching staff equally.

It is important periodically to hold an intellectual dialogue on the subject of a school’s salary system, its underpinning philosophy and how it is actually working. Littleford & Associates can assist with that dialogue. It is better to undertake such a review with no mandated change in mind, but rather with an open mind.

John Littleford
Senior Partner

Faculty Salary Systems: Rapid and Systematic Changes in Schools Worldwide

State schools, public schools, independent schools and international schools throughout the world are studying and undertaking dramatic changes in teacher salary systems and structures. These changes, once unthinkable in collective bargaining systems, are “catching on” as both teachers and schools seek greater flexibility and predictability in future earning power.

Teachers are not risk takers. They are caregivers. Many do not know exactly what salary they make, and often are unfamiliar with their benefit packages and retirement assets. This is not a criticism. It is a fact and bespeaks the commitment that teachers have in a calling to work with children.

However, teachers have a strong drive to have absolute predictability of future earning power so they do not have to think about it. In interviewing over 25,000 teachers confidentially in the past ten years on the subject of salaries and salary systems in schools, Littleford & Associates has found that teachers want to know what their increases will be in each year as far into the future as possible.

Common Salary Systems and their Pitfalls

    1. Negotiated Salaries

Fifty percent of all independent schools in the US still have traditional “negotiated” salaries for teachers upon entry and in setting salary changes each year. In other countries worldwide, the percentage of schools using “negotiated” salaries is about ten percent. These schools (and their heads) are mostly still happy with, and committed to this flexibility. That commitment begins to flag as a long- term, trusted head is about to leave. Then all bets are off.

The traditional approach can lead to unintended bias, favoritism, and age and sex discrimination in the allocation of salaries to teachers over the long term. Many heads have unpublished “scales” or guidelines in their desk drawers. Even these efforts to keep unfairness and bias from entering the salary deliberations may fail over time.

New hires may demand, expect and receive salaries higher than long-term teachers who have served in the trenches. Once this word gets out, serious morale problems can follow.

    1. Salary Scales

Thirty percent of independent schools in the US have lock step, “lane and track” salary scales similar to the public schools, and based on years of experience and advanced degrees. Approximately eighty percent of independent schools outside of the US use these lock step scales.

Abandoning totally the thought of making individual value judgments about a teacher’s classroom teaching quality, some heads have moved to lock step scales. The teachers often assume that all teachers at the school are “good”, and any poor teachers would be asked to leave. Of course, that is not the case, as most schools lack the tools, and knowledge to create, and adhere to effective, honest and consistent teacher evaluation programs.

Salary scales are inevitably undermined, as both teachers and administration seek to skirt the system to meet market realities. Furthermore, schools with lock step salary systems always find themselves confronted with the second, major goal of teachers: the ability to INFLUENCE one’s own future earnings.

Once a lock step scale is in place, a teacher only advances either by “not dying” or by going up a step on the scale each year until the scale tops out. Today, most scales bring teachers to the top quickly and then create frustration by “freezing” salaries on the top step, usually step 11, 12, 13, or 14. Schools are now recognizing long-standing salary systems research that demonstrates that beyond the first five years, there is no correlation between longevity of teaching and effective teaching.

So how do teachers and administrators “break” the scale, thereby attempting to influence their future earnings?

    1. Promotion due to earning an advanced degree or graduate credits within systems that provide columns, and thus, salary shifts, for earning graduate credits up to 120 credits. These automatic salary shifts require no administrative judgment and serve as a good public relations tool.

Known research has shown that there is no correlation between advanced degrees and effective teaching. Does a teacher with an MA degree deserve up to $4,000-$8,000 more per year (in some schools) than a BA teacher, without regard to evaluation of performance in the classroom?

  1. Promotion through “stipends” or extracurricular pay for everything from coaching to chaperoning dances to writing letters of recommendation. “Positions of responsibility” or stipend pay is the primary vehicle allowing teachers in international schools to circumvent the scales.
  2. Jumping steps on the scale, or reinterpreting a teacher’s background and experience to raise initial placement on the salary scale.
  3. Tutoring, a non “system” that can become an insidious, recognized and very Lucrative way for teachers to earn more money, even if not directly tutoring students in their own classes.

The Range or Career Ladder Concept – The Trend Worldwide

Given the liabilities and challenges of both traditional salary negotiations, and the rigidity of salary scales, it is no wonder that a new system had to be developed.

The “range”, “band” or “career ladder’ concept was the result. Versions are now in place in twenty percent of all US independent schools and many school systems around the world. Littleford and Associates has observed a clear trend worldwide in state and private schools to examine, and move toward some type of “range system” or “career ladder.”

Why? “Ranges” or “career ladders” provide a combination of the predictability of future earning power that teachers crave while at the same time provide schools with the flexibility to reward those who make the greatest contributions to teaching quality, school life and workload.

Schools that already have rigid scales find changing to a “range” the most difficult. Schools with traditional flexibility in the head’s ability to set salary decisions find moving to a career ladder an easier task. The concept, however, is adaptable and feasible in most settings.

Specifically, how may such a system work?

    1. Conceptually, the school sets either several “bands” or “ladders” through which, AND across which a teacher may move, based on qualities other than simple longevity and advanced degrees. Those other traits include: quality of classroom instruction; workload; relationships with parents; counseling and advising students; mentoring fellow teachers; demonstrating leadership skills; innovating curriculum; and seeking professional growth, among others.

The career ladder is analogous to the college categories of instructor, assistant professor, associate professor and full professor. In the school context, these are often: teacher, experienced teacher, senior teacher and faculty leader. “Master Teacher” systems have fallen out of favor because within a short period, all teachers became master teachers, thus bankrupting the system and eviscerating any meaning or distinction to the term.

Range, band or career ladder systems also presuppose some limits on how many teachers or what percentage would be in any category at any point in time.

  1. A “range” approach may involve a minimum and maximum salary at each experience level, and/or a midpoint within the range. Others set a minimum, but no maximum, allowing merit (no longer a dirty word) to influence upper placement levels. . Bonus salary programs CAN and DO operate in concert with range, band and career ladder salary systems. Many school have both career ladders AND annual merit pay bonus payments, not added to base salary, that occur within the same salary system as less frequent career ladder shifts. Career ladder shifts can involve a substantial hike in base pay.
  2. All range and career ladder systems assume judgment of some sort, and that requires an effective and trusted teacher evaluation process (as opposed to “peer coaching” or “portfolio evaluation”)

In summary, schools with established career ladders have found over time that teachers and administration are pleased with BOTH the predictability of future earning power and known rules of HOW to influence future earning power.

The Compensation Philosophy

All salary systems must be reviewed periodically. Schools make a big mistake when they adhere to a salary system long-term after it may no longer meet the needs of the particular faculty then in place. Some salary systems were designed initially for a very senior faculty, but as they retire, the group remaining may no longer be motivated by, or support the old salary structure.

Thus, the goal should be to have a logical and cohesive philosophy to any salary system and to review it. A realistic philosophy is NOT to be in “the top 10% of NAIS schools locally, regionally or nationally.” If every school has that goal (and many do), the goal is not sustainable, as the goalposts keep shifting.

For example, for young and mid-career teachers, cash salaries are important. Other schools may strive to provide a package of tuition remission, housing and family medical coverage superior to that of the competition. Has your school developed a salary system based upon what TYPE of teachers a school is trying to attract and hold, and what quality of living it believes its salary system and benefit package can provide?

The objective must be to have an intellectual dialogue among teachers, board and administration about effective and appropriate models of compensation and benefit systems now in place. From that overview, the local players can determine what, if any, changes may be desired in a compensation review process.

John Littleford
Senior Partner

The Professional Growth "Trap"

A common misconception among heads of school and teachers in US and international schools is that professional growth and teacher accountability are either incompatible objectives, or goals that must be accomplished separately. This is a “trap.”

Teacher evaluation approaches that attempt to separate professional growth from substantive teacher feedback almost always fail to deliver either result. While they appear less threatening to teachers on the surface, these approaches, in fact, tend to fail because they lack substance and structure. Furthermore, they feed and extend the perceived gap and lack of trust between administration and faculty.

When a credible and substantive teacher evaluation system is in place and accepted by both faculty and administration, several benefits accrue to both parties.

Teachers can view such a system as supportive and instructional while also a source of meaningful, substantive feedback. The two biggest criticisms by teachers of evaluation are that it is either threatening and unfair on the one hand, or lacks substance for real growth, on the other.

Heads feel the benefits of improved faculty morale and school stability because their ability to deliver feedback and professional growth opportunities becomes more structured and predictable. Parental gossip in the carpool line becomes a far less significant element of teacher evaluation.

    1. Head Goals and Teacher Evaluation in Schools

In evaluating a teacher’s performance, heads tend to share a common goal of avoiding conflict and political problems.

In many independent schools with teacher evaluation “models” that resemble those in public schools, the head can avoid value judgments about the quality of teaching in the classroom. The head seemingly maintains good public relations as all teachers are presumed to be “good” and tenure is preserved. In the long term, however, overall faculty morale is undermined.

Another common scenario is a teacher evaluation “system” that is sitting on a shelf because it is not a priority of the current administration. OR, evaluation systems may simply not exist in any form or as purely self-reflection and goal-setting.

When meaningful and consistent teacher evaluation is either dormant or completely absent, a healthy school climate may be negatively affected, as the power to make judgments about teacher performance shifts to the parent body and the students.

Evaluation systems that rest solely on peer appraisal or self reflection and self evaluation sink of their own weight over time as teachers regard them as superficial, repetitive and lacking substance.

    1. The Underlying Principles of an Effective Evaluation System

In independent schools, we tend to evaluate teachers when they are new and on probation but not thereafter, UNLESS they are “in trouble” because of parental or student feedback. Such “evaluation” is abhorred by teachers and is reactive, not proactive.

There are several important principles that form the basis of an effective evaluation system. When these principles, representing structure, predictability and objectivity, are NOT present, teachers often fear faculty evaluation and heads tend to avoid it. If they ARE present, the system can be embraced, not circumvented by faculty and heads; the “trap” of separating teacher accountability from professional development is avoided.

These fundamental principles are as follows:

      • From the very early stages, teachers must be involved in the development of the criteria by which they will be evaluated.

The criteria may include, but are not limited to, the teaching act, the teaching environment and criteria outside the classroom that relate to responsibility as an employee. Most of the criteria must be based on researched principles of effective instruction and management and can include “local” criteria as well.

      • Student feedback, in the form of a teacher-designed questionnaire, should be part of the process at the appropriate grade level(s). Research has shown student feedback to be highly reliable when administered correctly.
      • Peer observations and feedback from colleagues are encouraged as ONE component of the system, integral to, and not separate from, the overall formal evaluation process.
      • Classroom observations should include both announced AND unannounced components. Teacher submission of a lesson plan or a pre-conference precedes an announced visit.
      • Division head(s) are actively involved in the process. They have the authority and responsibility to organize and direct all activities related to the process.
      • Department heads and grade level coordinators may be responsible for some evaluations and written observations based on these observations. They consult with the division head in the writing of the summative evaluation. There should be an evaluation “team.”
      • The evaluators are highly competent and trained in a variety of ways. In service sessions are ongoing in order to insure the quality and consistency of the process.
      • At least two supervisors, who have observed or conferenced with the faculty member several times during the year, complete the summative report.
      • The system is linked to professional growth goals so that each teacher sees a direct relationship between evaluation and professional development. Staff development dollars follow the guidelines and outcomes of the teacher evaluation process.
    1. Summary

With a consistent, widely accepted set of criteria, the above system is not capricious. The process should include multiple adult evaluators, student feedback and self evaluation.

When appropriately designed and supported, the evaluation system rests in the hands of the division heads with the backing of the department heads and teachers. Teachers and administrators view it as supportive, non-threatening and a meaningful professional growth tool.

Furthermore, when the professional staff designs a meaningful and appropriate system, and communicates that system to parents, there is another important benefit to the school. Parents are less likely to engage in their own evaluation of teachers, and receive the positive message that the professional staff continues to grow.

John Littleford
Senior Partner

Trends from the Trenches – Patterns in Faculty Benefits

In a time of economic uncertainty and an anticipated teacher shortage, independent schools are searching for ways to attract and retain quality teachers. One way is to examine compensation structures for effective, creative alternatives to salaries determined by the discretion of the head or lock-step salary scales like those in public schools based on longevity and advanced degrees or credits.

Another, equally important way is to review and update the benefits package offered and how it is delivered. Schools that overlook the need to review and update their benefit offerings miss a potential opportunity to support faculty and to allocate precious resources in a way that allows the school to reap financial rewards as well.

New Directions in Benefits

Tuition Remission. The trend is away from tuition remission and toward need based financial aid where the faculty receives priority allocation in the granting of financial aid. Many schools will exclude the teacher’s own school salary from the need calculation. Schools that move away from 100% remission grandfather current staff. Many schools begin by first reducing remission to 50% (and after that additional support may be added from need based financial aid) and later, they eliminate remission entirely.

Tuition remission is a discriminatory benefit in that it sends a powerful amount of tax free money to a narrow range of teachers with children current enrolled at the school. On the other hand, tuition remission engenders long term teacher loyalty and prompts teachers to want a higher standard of teaching and accountability for fellow teachers because one’s own child is at stake.

Medical and child care reimbursement accounts. These are becoming more popular with many schools experiencing upwards of 70% participation, resulting in significant income and FICA tax savings for the employee and FICA savings for the school. Some schools continue to have medical “caps” on the amount that can be sheltered for medical reimbursement accounts. There is no federal limit, so such caps are a school decision. Almost 90% of independent schools today have medical and child care reimbursement accounts. Most are still poorly used.

Stipends. Schools are becoming more cautious about the rapidity with which they add extra curricular functions for which stipends are paid. These roles are proliferating, costing schools not only massive additional sums of money but undermining the concept that some degree of extra curricular assignment is part and parcel of the definition of a full time job for teachers in independent schools.

One School recently found that its elaborate extra curricular pay system (with 8 levels and three steps within each level) still resulted in teachers feeling that assignments were categorized unfairly in terms of time and money paid. The drive for equity and fairness sputtered out and resulted in back biting. “Fairness” within the independent school culture must include a definition of a full time job that goes beyond classroom teaching.

The “benefit bank”. This may work well in schools where a large number of teachers participate in the school’s medical insurance plan. A benefit bank caps the amount of money the school contributes to such a plan at, say, $5,000-$7,000. This money can be used to buy a less expensive policy, a mid priced policy or an “enriched” policy. Alternately, the money may be taken as taxable cash. It can also be used to buy other benefits such as additional retirement, or more life or disability insurance. Over time teachers will spend the money differently as their family needs change.

Long-term disability. Many schools have now reverted to having the employee pay the premium for long-term disability rather than having the school do it. The school gives the cash value of the premium to the employee, who may (or may not) buy the policy. If the school pays the premium, any disability income received is fully taxable. If the employee pays the premium, disability income is not taxable. Most schools using this approach have worked out ways that all employees are still covered by the policy.

Housing Issues: Many boarding as well as day schools are reviewing their current housing benefits to ensure fairness, equity, compliance with IRS rulings and intelligent management of housing “stock.” A few day schools have housing for half or more of their faculty. Often beneficiaries of housing have no formal plant, campus or student supervisory functions. Some of these schools may be charging solely the value of rent forgiven (the tax that would be owed for that value of rent forgiven.) Other day schools charge rent that is below market value. Both practices operate in a danger zone. If that rent is too far below (more the 5% below) fair market value, there is a risk of an income tax liability and subsequent penalty issue.

Many boarding schools provide off campus housing for faculty with no, or almost no supervisory responsibility. Many others provide on-campus, free-standing housing, and in exchange, the teacher supervises students for two hours per week in the dorm, or in study hall in the library one evening per week. Does this constitute enough supervisory value for the school to argue that this rent free house is not income to the teacher and thus, subject to income tax? Is the teacher’s periodic and “light” duty really worth $15,000 to $30,000 a year in what would normally be a taxable benefit?

Every boarding and day school teacher receiving free housing, or housing subsidized below fair market value should have a real, formal responsibility for supervision of building and plant and/or student activities on campus. This set of requirements should be written into the teacher’s contract as a condition of having that housing.

Many schools also do not charge rent even for phone or cable service to the houses in which faculty live on or off campus. The value of these additional benefits is significant, in many cases more than $2000-$3000 a year of income that is not treated as a taxable benefit. Schools that do not examine their policies carefully to ensure appropriate compliance are subjecting both the teachers and the school to a major risk.

Day care. Providing day care continues to grow as an option in our schools. If the program is for employee children only, regulatory hoops are usually less onerous than if the service is a commercial one offered to the general public. Most schools with this offering provide the space and overhead for programs that serve children from 6 weeks to 4 years of age. Tuition is charged directly to the staff but the costs are usually competitive and the convenience of having one’s child close by builds powerful employee loyalty.

Professional Development. Schools should plan to spend $1000 per teacher per year on professional development. The research and development money invested in teachers is the best money spent. Many schools now set staff development budgets based on $1500 per teacher.

Workload. While workload is not a “benefit”, it is important to consider the following: How does workload vary among teachers within the school itself? How does it compare to workload within the school’s competitive market and region? Addressing any workload-related issues can avoid feelings of inequity and further support teachers.

Teachers working in grades Pre-school through 4, teach, on average, 1,000 minutes to 2,000 minutes a week of class time, excluding lunch, recess, hall, and dining room duties. The minutes refer only to actual teaching time. The national average for Pre-K-4 teachers is about 1600 minutes a week. For middle school teachers nationwide the average number of minutes per week of class teaching time is 1200 with a range of 800-1600. For upper schools the comparable number is 900 with a range of 600-1300. This excludes extra curricular activities.

The realities of schools are that teachers teaching 3 classes a day feel overworked and pressed for time just as much as teachers teaching 6 classes a day. This author finds no sense in those teaching only three classes a day that this is a great arrangement. The less the workload, the more teachers become adjusted to it. Expectations rise from there.

Independent schools nationwide must keep current with the many changes and challenges in overall faculty compensation patterns. If they intend to find and keep quality faculty, schools must think creatively and proactively and demonstrate flexibility in both salary and benefits structure and delivery.

John Littleford
Senior Partner

The Faculty Salary Challenge: Not Just How Much, But How?

Ladder, Band and Range Considerations and the School’s Philosophy of Compensation

In independent schools, the four key elements of compensation planning are: the philosophy of compensation; the salary delivery system; the benefits structure; and the level of cash.

Through interviews with over 27,000 teachers and 3000 heads of school over the past 15 years, Littleford and Associates has learned that most schools focus on faculty benefits and the annual percentage increase in salaries. They totally overlook the first and most important two elements of compensation: philosophy and salary delivery system. These speak to the school’s mission and direction.

    1. The Philosophy of Compensation

The philosophy of compensation is not simply a statement that the school’s goal for faculty salaries is to be within the top 20% of similar regional and national NAIS schools.

The compensation philosophy addresses the following question: Who is the school trying to attract and retain? These may be young, mid career or senior teachers from a local, regional or national pool. It may be singles or teachers with families. The school may be seeking teachers with talents in specific disciplines or the “triple threat” teacher, advisor and coach.

The compensation philosophy also delivers to the faculty the important message of what qualities it values in its teaching professionals. It can be a powerful tool for communicating and affirming the mission and vision of the school.

An appropriate philosophy of compensation may be tied to quality of life of middle class dignity in a specific community, assuming the teacher has a spouse or partner. Beginning salaries might well be tied to the cost of renting a one bedroom apartment. For example, in some moderate expense areas of California, that figure approaches $1500 a month. The banking industry would suggest that an apartment at that price requires a salary of $50,000.

    1. The Salary Delivery System.

Individual Negotiation? Scale? Band? Ladder? Range? Does this “system” accurately reflect the school’s goals and philosophy for attracting and retaining teachers?

      1. “Negotiated” Salaries

A majority of independent school heads have the authority to effect modest change in a teacher’s compensation by annually exercising some degree of judgment. That judgment may come from substantive feedback from division heads, department heads and a concrete written evaluation process. In some cases, it may be subtly influenced by informal factors such as rumor, innuendo and the car pool line.

The word “merit pay” is still associated in the minds of most people with “discretionary” pay. This is still practiced by the majority of school heads though with little pomp. Most of the surveys conducted each year by Littleford & Associates indicate that heads are happier with this system than those whose schools have “lock step” scales.

However, heads may not be aware of the risks of age and sex discrimination when inequities occur over time in “discretionary” pay decisions that are not documented for performance related reasons. In other words, there may not be an audit trail of evaluation or reasoning for these differential pay judgments other than the market was better for teachers one year than another. Perhaps the head’s own informal sources of information affected those salary decisions. In some cases, it was a former head’s judgment that affected salary decisions and the current head has no clue as to why the current pattern exists.

      1. Scales

In about thirty percent of our schools, heads have given up any flexibility or judgment in the annual salary increase decision. These schools have published scales, most with a number of longevity based steps and a column for an M.A. degree, additional graduate credits and rarely, a Ph.D. degree. These heads rely exclusively on titles, stipends, added assignments, professional growth dollars, summer stipends and other “soft” signals to reward faculty for perceived or formally evaluated performance. In hiring new teachers from the marketplace, on the other hand, they are able to exercise, and in many cases are required to exercise, a modicum of flexibility.

Schools using scales have opted to reward performance only through heavier workloads, extra assignments, extra curricular pay, stipends, quasi administrative positions, summer grants, and other tools which may or may not be helpful to the school in the long term. These techniques may or may not be healthy for teachers as they age, have families and wonder about whether the School assigns any significant monetary value to the teaching process itself.

      1. The Movement Towards “Bands”

A growing number of schools, now about twenty percent, use some form of “band”, “range” or “ladder” to make compensation changes. “Band”, “range” or “ladder” salary delivery systems acknowledge some compensation movement for length of service but also recognize others forms of contributions. Some of these systems are published and some are not.

A “ladder” structure is not unlike a university system of instructor, assistant professor, associate professor and full professor. Many schools use titles such as “teacher”, “experienced teacher”, “senior teacher”, “master teacher” and “faculty leader.”

A “band” is a pattern with a top side and bottom end, and all teachers are paid in or around this “band” based on individual or group criteria.

A “range” system may provide for a minimum level of compensation for each year of experience or cohort of experience, but no maximum. Maximum salaries are left open for meeting other criteria. A range may be combined as well with a scale, so that each specific year on the scale has a beginning, mid point and top figure as a sliding number along this range.

Now a number of schools use the NAIS “cohorts’ of 0-5, 6-10, 11-15, 16-20, 21-25 (or higher) as the key elements of a “band” and publish the minimum and/or maximum salaries within those “bands” or “cohorts.” However, these systems may leave open the tools by which the school may move a teacher within that band. Longevity alone and advanced degrees alone do not provide for progression. There are usually other elements or criteria.

These “banding” systems may provide for movement vertically on a ladder based on longevity but usually with fewer steps. They ALSO allow for movement ACROSS the band or ladder for other types of recognized strengths:

        1. Quality of teaching in the classroom as evaluated over time by a team of evaluators and using published researched based criteria;
        2. Workload recognition, avoiding the slippery slope of extra curricular pay and stipends;
        3. Recognition for professional growth and/or innovative teaching;
        4. Proven mentoring and nurturing of one’s peers;
        5. Service as an outstanding counselor or advisor;
        6. Assuming significant leadership and committee roles;
        7. Reflecting a consistent and obvious support of school mission, as well as parent and community relations.
    1. The Rules of the Game in Flexible Compensation

The key to all of these discussions of more flexible compensation plans are the following essential tools:

      1. A well defined, understood and agreed upon definition of a full time job. Most independent school teachers regard TIME and STRESS as their key issues. Many teachers with 5 or 6 classes and extra assignments regard themselves as overburdened with time demands AS do teachers at schools where the load is 3 or 4 classes a day with no clear expectation of extra curricular assignments. Teachers become accustomed to their own “norm” or pattern.

Many teachers quote to this consultant that they teach four or five “courses” but this follow up question is key: Do these classes meet every day? Or is there a 6 day schedule or some rotating schedule which reduces actual class time so that the actual number of 50 minute classes a day is 3 or 4? These are the schools that have the more comfortable workloads unless there is a substantial extracurricular load required during school or other after school duty assignments.

      1. A credible, consistent evaluation process based on published, research based criteria and a trained evaluation team of 2-3 administrators and teachers. Such evaluations need to be based mostly on unannounced visits. There must be a sufficient number to make them an accurate reflection of classroom quality, not a “snap shot.” Professional growth and staff development dollars need to be tied to, and result from, information gleaned from the evaluation process. Test scores are not a part of this process, whereas organized student feedback should be.
      2. Clarity in the compensation philosophy and salary structure such that teachers know the “rules of the game”, and how to get ahead financially. It should not be a secret or a mystery for teachers to figure out how to advance themselves financially in the school.
      3. A benefit package that is flexible enough to provide different opportunities for teachers based on their age, experience, family status and career level. The same dollars can be expended differently in very creative benefit design systems.

The important “understandings” underlying flexible compensation plans are the following:

      1. Teachers care greatly about predictability of future earning power. They are not risk takers as a rule, but care givers. As such, many do not know their own exact salaries when asked. That reflects the fact that most do not focus on money. Generally teachers prefer salary scales.
      2. Teachers ALSO need and want to know how to influence their own future earning power as their family circumstances and needs change. They have learned that the ways to affect their earning power include: extra curricular pay; stipends, administrative titles; tutoring; more graduate credits; and years of experience. They need to know and rely upon OTHER elements that may prove far more important to the quality of the School, and their accountability to the School’s mission.
      3. Teachers care most about salary “structures” or formal “systems” when they feel they are underpaid. They care far less about the “structure” or salary “system” if they feel well paid by comparison to local public and independent schools.
      4. Teachers who feel well paid “do not ask and do not tell” peers about compensation. Teachers who feel underpaid, or unfairly paid, frequently ask others about their own compensation and share compensation information more readily.

Band and range salary systems help to provide a balance between the old “discretionary” systems and the rigid public school salary scales.

    1. Summary

Flexibility in compensation IS still possible, viable, and supportable IF the rules of the game are defined, accepted and understood. Performance factors may indeed influence salaries within bands, ranges and ladder systems. However, it must be done openly, honestly and based on documented performance which must and can be explained and defended.

Performance or banding opportunities may provide for:

      1. Annual increases in base pay
      2. Movement along a range
      3. Movement across a ladder
      4. Movement within a band
      5. Lump sum payments in June based on individual, group, team or whole faculty performance
      6. Professional growth expenditures for summer grants, sabbaticals, travel opportunities for either individual teachers or teams of teachers working on common or collaborative projects

Littleford and Associates has over 600 clients worldwide on the topic of faculty compensation. We can assist your school in assessing your current faculty compensation and benefits systems and evaluating alternatives that include introducing flexibility into traditional models.

John Littleford
Senior Partner